From: Lawrence J. Goldstein [ljgoldstein@smplp.com]
Sent: Friday, January 24, 2003 1:43 PM
To: rule-comments@sec.gov
Cc: LJGoldstein (BLOOM); Josh M Eudowe
Subject: (s7-45-02) Proposed rule re attorneys to inform the agency.
SECURITIES AND EXCHANGE COMMISSION
BACKGROUND
==========
The SEC voted Thursday to adopt a rule that outside corporate lawyers must
go to company officials if they suspect fraud. That was a weakened move from an
earlier proposal that also would have required lawyers to inform the SEC if they
couldn't get company officials to stop the fraud.
Companies themselves will be required to notify the SEC if attorneys have
resigned in protest, as they must do when an accounting firm resigns from
auditing a company's books.
Groups representing attorneys, such as the American Bar Association, had
objected to the SEC proposal, saying it improperly exceeded Congress' mandate in
the corporate fraud law. Critics say it could hurt attorney-client
confidentiality and inhibit companies in their communications with outside
lawyers.
REQUEST FOR PUBLIC REVIEW AND COMMENT
=====================================
Since the SEC put out for an additional 60 days of public review of the
requirement for attorneys to inform the agency I wish to submit the following
comment.
COMMENT: RULE PROPOSAL
======================
How about a rule that simply:
requires any attorney for a corporation to certify
on a regular basis (e.g., quarterly) that in his opinion,
he did not advise management on any matter where there
might be a potential conflict of interest
between management and stockholders (and to specify any
matters in which there might be conflicts)?
How would the corporate bar argue that is bad?
It gets to the essence of the VERY REASON THIS ISSUE IS BEFORE THE COM
The question of Who is the client?
Yours Truly,
Lawrence J. Goldstein
Santa Monica Partners, L.P.
1865 Palmer Avenue
Larchmont, New York 10538
914 833 0875
Lawrence J. Goldstein
Santa Monica Partners, L.P.
1865 Palmer Avenue
Larchmont, New York 10538
(913) 833-0875